Infosys did not paint a pretty picture when it gave guidance for Q2 2013 when it declared its results for Q1 2013, despite the fact that Q2 is a pretty strong quarter for most IT companies.
Clearly, while revenue and profitability are likely to be muted, there may be further cause for concern for the company on account of the sharp gains in the rupee against the dollar.
Though, the full impact of the falling rupee is unlikely to be felt completely in this quarter as most of the gains in the rupee has happened after the government announced reform measures on September 14 and followed them by reforms in early October 2012. So, there could be marginal impact of the rupee strengthening against the dollar on the performance of Infosys.
Also, the company is unlikely to have huge employee costs escalation since it has not revised salaries so far this year, thus protecting its margins. In terms of overall performance HCL Technologies and TCS are likely to report performance than Infosys and Wipro for Q2 2013.
According to CLSA the Infosys stock could nosedive by another 40 per cent from the current levels in next 12 months on lower than expected performance. In the past the stock has even slumped 10% after the declaration of its results. It would be interesting to see what happens on Friday the 13th.